"You are neither right nor wrong because people agree with you."  - Benjamin Graham


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Stingy Links
http://www.stingyinvestor.com/SI/articles/articlearchive.shtml

Patient Capital Q4
http://www.patientcapital.com/newsletters/newsletter-2007-12.pdf
"The possibility of faltering earnings in a weakening environment coupled
with a whiff of inflation has put market participants in a skittish mood.
As a result, investors that were recently very optimistic are now
frightened. We view economic contractions as a very normal part of the business
cycle and welcome such times as an opportunity to purchase excellent
businesses at very attractive prices."

Buffett "huge bull on the U.S. economy"
http://network.nationalpost.com/np/blogs/wealthyboomer/archive/2008/02/07/buffett-huge-bull-on-the-u-s-economy.aspx
"The second step is just as relevant, given all the nail-biting about
whether or not we're in a recession. Hagstrom writes that "if you find yourself
discussing and debating whether the economy is poised for growth or
tilting toward a recession, whether interest rates are moving up or down, or
whether there is inflation or disinflation, STOP! Give yourself a break.
Except for his preconceived notions that the economy inherently has an
inflation bias, Buffett dedicates no time or energy analyzing the economy.""

Warren Buffett makes news in Canada
http://www.cnbc.com/id/23047648/site/14081545?__source=yahoo%7Cheadline%7Cquote%7Ctext%7C&par=yahoo
"Warren Buffett answered questions for almost 90 minutes yesterday during
his appearance in Toronto to promote Business Wire's expansion into Canada.
We focused on his credit, dollar and economy comments, but he made a lot
of other news as well, including a revelation to Canada's National Post
newspaper that he made "several hundred million dollars" owning the Canadian
dollar, then sold, and now wishes he had kept his holdings in the
Loonie."

Business Wire: A conversation with Warren Buffett
http://phx.corporate-ir.net/phoenix.zhtml?c=127541&p=irol-eventDetails&EventId=1758500
Business Wire Canada Opening Reception: A Conversation with Warren Buffett
(1 Hour 30 Minute MP3)

Can't pay? Just walk away
http://money.cnn.com/2008/02/06/real_estate/walking_away/index.htm?postversion=2008020610
"Lenders are afraid that borrowers may find it's worth the hit to their
credit scores, if they can drastically reduce their housing expenses. Someone
with good credit and a $600,000 home in a town with cratering real estate
prices could buy a similar house nearby for $450,000, and then let the
other $600,000 mortgage go into foreclosure. The stage is set for this kind
of thing particularly in California, where huge numbers of buyers used low
or no-down deals to buy homes. The trend has even spawned at least one
new business, San Diego-based YouWalkAway.com, which for a fee of $1,000
purports to guide clients through the process of ditching their mortgages. It
launched in early January, and says it has already signed up 180 clients.
California is a bit of a safe haven for these borrowers, since banks that
repossess and then sell a foreclosed property for less than the mortgage
that was owed on it cannot come after borrowers for the difference - as
long as it's the initial mortgage, one that has not been refinanced. So if a
borrower owes $200,000 and the bank sells the house for $170,000, the
borrower comes out of it debt-free. And for many homeowners, the prospect of
becoming debt-free is growing increasingly alluring."

Online brokers: Sizing up your RRSP options
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20080202/STMAIN02
"Investors of all types can benefit from an online broker, be they
conservative types who prefer bonds and GICs, aggressive stock traders or
middle-of-the road types who want stocks, bonds and mutual funds. The challenge is
to find the broker that best fits your needs. To that end, Portfolio
Strategy has evaluated 13 online brokers to find the best choices in six areas
relevant to RRSP investing."

Getting Knocked Down by Prime ARMs
http://www.businessweek.com/lifestyle/content/jan2008/bw20080131_542105.htm
"We've been reading a lot lately about how subprime mortgages have
submarined the economy. Lenders and banks have been taken to the woodshed for
irresponsibly giving money to home buyers with poor credit just so they could
bundle up the mortgages and resell them as toxic residential-mortgage
bonds. But, while there's no denying the subprime problem, on closer look it's
clear that even prime borrowers were taking on more debt than they could
afford. How bad is it? In Arizona, between the third quarters of 2006 and
2007, there was a 902% rise in foreclosures started against homeowners who
had prime adjustable-rate mortgages, known as ARMs, according to the
Mortgage Bankers Assn. ARMs, whether prime or subprime, are the real culprit
in the housing crisis because they've allowed too many people to buy homes
with almost no money down, with the hope that they could flip the
properties or have rates drop before the loans reset. The rise in prime ARM
foreclosure starts isn't isolated to a few states. Nationally, foreclosure
starts related to prime ARMs jumped 253% in the third quarter of 2007 when
compared to a year earlier."

What would Buffett buy?
http://www.businessweek.com/investor/content/feb2008/pi2008024_505818.htm
"How does he do it? Author Robert Hagstrom tried to compile Buffett's key
investing strategies in his 1994 best seller, The Warren Buffett Way:
Investment Strategies of the World's Greatest Investor. With Hagstrom's book as
a source, Standard & Poor's Portfolio Services devised a stock screen
that picks companies using criteria similar to those that fit the legendary
investor's growth-oriented style. S&P updates this screen on a semiannual
basis, during February and again in August. Over the years, the screen has
put in a pretty good performance itself. From Feb. 13, 1995, through Jan.
17, 2008, the screen had an annualized return of 14.9%, vs. 8.2% for the
S&P 500. In 2007, the screen stocks gained 15.7%, vs. 3.5% for the S&P 500.
(All results reflect price appreciation only.)"

Fat tails and nonlinearity
http://www.lmcm.com/pdf/FatTailsandNonlinearity.pdf
"If you are involved in financial markets, you have gotten the memo about
fat tails by now. But awareness of extreme events is not enough. Thoughtful
investors must understand two interrelated aspects of the market. The
first is the statistical properties of price movements, including important
deviations from the bell-shaped distribution. Academics, risk managers, and
quantitative investors have explored this aspect extensively. Researchers
recognized decades ago that the distribution of price changes includes
fat tails. The second aspect, and one often overlooked or misunderstood, is
the mechanism that leads to the statistical imprint. Much of the work on
the market's statistical properties is divorced from the propagating
mechanism, while traditional theories of market efficiency assume the
mechanisms. Crucially, understanding the mechanism provides insight into how and why
markets fail."

The law of one price in financial markets
http://faculty.chicagogsb.edu/richard.thaler/research/lawof.pdf
"It is good for a scientific enterprise, as well as for a society, to have
well-established laws. Physics has excellent laws, such as the law of
gravity. What does economics have? The first law of economics is clearly the
law of supply and demand, and a fine law it is. We would nominate as the
second law 'the law of one price,' hereafter simply the Law. The Law states
that identical goods must have identical prices. For example, an ounce of
gold should have the same price (expressed in U.S. dollars) in London as
it does in Zurich, otherwise gold would flow from one city to the other.
Economic theory teaches us to expect the Law to hold exactly in competitive
markets with no transactions costs and no barriers to trade, but in
practice, details about market institutions are important in determining whether
violations of the Law can occur."


S&P/TSX60 Value Screens
http://www.stingyinvestor.com/SI/strategy.shtml 

High Dividend Yield Stocks                     P/E P/B P/S P/C P/D Yield*
============================================== === === === === === ======
Biovail (BVF)                                   5   5   2   5   5    5
CIBC (CM)                                       5   4   4   3   5    5
Bank of Montreal (BMO)                          3   4   3   3   5    5
National Bank of Canada (NA)                    2   4   4   3   5    5
Telus (T)                                       3   4   3   4   5    5
BCE (BCE)                                       3   3   4   4   5    5
Royal Bank (RY)                                 4   3   3   2   5    5
Bank of Nova Scotia (BNS)                       4   3   2   2   5    5
TransCanada (TRP)                               2   3   2   3   5    5
Shaw Comm Cl.B (SJR.B)                          2   3   3   4   4    4
More Info: http://www.stingyinvestor.com/SI/strategy/dogs.shtml 

Value Ratio Stocks                             P/E P/B P/S P/C P/D  VR
============================================== === === === === === =====
Biovail (BVF)                                   5   5   2   5   5   0.6
CIBC (CM)                                       5   4   4   3   5   1.4
Thomson (TOC)                                   5   4   2   3   4   1.6
Teck Cominco Limited (TCK.B)                    5   4   4   4   4   2.3
Bank of Montreal (BMO)                          3   4   3   3   5   2.6
Telus (T)                                       3   4   3   4   5   3.0
Royal Bank (RY)                                 4   3   3   2   5   3.0
Bank of Nova Scotia (BNS)                       4   3   2   2   5   3.0
BCE (BCE)                                       3   3   4   4   5   3.1
Husky Energy (HSE)                              5   2   4   5   4   3.1
More Info: http://www.stingyinvestor.com/SI/strategy/valueratio.shtml 

Graham Stocks                                  P/E P/B P/D   G$   dG$(%)
============================================== === === === ====== ======
MDS Inc. (MDS)                                  5   5   0   40.82 144.31
Lundin Mining Corporation (LUN)                 5   5   0   16.91 109.57
Thomson (TOC)                                   5   4   4   49.03  44.58
Biovail (BVF)                                   5   5   5   19.00  35.24
Magna Cl.A (MG.A)                               4   5   3   99.38  31.60
Teck Cominco Limited (TCK.B)                    5   4   4   41.87  20.56
CIBC (CM)                                       5   4   5   78.72  16.67
Petro Canada (PCA)                              5   4   2   49.87  12.67
ACE Aviation Holdings Inc. (ACE.B)              4   5   0   26.18  11.68
Talisman Energy (TLM)                           5   4   2   17.28  11.21
Canadian Tire Corporation Limited (CTC.A)       4   4   2   61.61   1.54
Sun Life (SLF)                                  4   5   4   49.12   1.30
More Info: http://www.stingyinvestor.com/SI/strategy/graham.shtml 

*Notes: http://www.stingyinvestor.com/SI/strategy/notes.shtml 

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Books for Stingy Investors

Security Analysis
by Benjamin Graham & David Dodd

Graham and Dodd's Security Analysis is the investment bible for
smart investors. Regrettably the breadth of material that it
covers can be intimidating and only dedicated students are likely to
make it through its 770 pages. However, Security Analysis is
filled with Graham's practical investment philosophy and if you're
a serious investor then you should read this book.
Amazon Link: http://www.amazon.ca/exec/obidos/ASIN/0071448209/


Stock Research From Dan Hallett & Associates

The Rothery Report
http://www.rotheryreport.com/ 

The Rothery Report provides research on select deep-value stocks in
North America. Discover overlooked and undervalued stocks in quarterly
investment reports which provide detailed analysis of Canadian and
U.S. stocks.  Weekly email news and additional updates keep
subscribers informed about new opportunities and developments.

Rothery Report Performance (03/31/2001 to 12/31/2007)
  Average Capital Gain    Average Holding Period
          45.2%                   2.4 Years

Learn More
http://www.rotheryreport.com/store/store.shtml

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ISSN 1499-2795 Copyright Dan Hallett and Associates Inc., 2008.
All rights reserved. The securities mentioned in this report are not
appropriate for all investors. Consult your professional investment
advisor before making any investment decision.  While all reasonable
effort is made to ensure the accuracy of information and data
contained herein, accuracy can not be guaranteed. Past performance is
not a good predictor of future performance.  Results are not
guaranteed and we assume no liability whatsoever for any material
losses that may occur.  No compensation for suggesting particular
securities or financial advisors is solicited or accepted.  The
information in this newsletter, and in its related website, is not
intended to be, nor does it constitute, financial advice or
recommendations.  Investing in stocks can be risky and may result in
substantial losses.  A Dan Hallett and Associates Inc.(DH&A)
publication.  DH&A is registered as Investment Counsel in the province
of Ontario. DH&A, or related-parties may have an interest in the
securities mentioned.